We should be able to spectate others while they are challenging each other. Like we can't see the chat but, we can see the battle itself. Would be fun especially when players make tournaments like Death Gigas' tournament.
Some times people use the challenge feature to talk in private. I suggest also making a toggle option to show the chat to spectators like view chat log, etc.. You will only be able to see the chat of the person who accepts showing his/her chat. If both players accept, you will see the entire chat. If none does, you won't see anyone's chat.